OWN A FRANCHISE
Franchising
The franchising can have a number of meanings. But in this context we are talking about what is technically known as 'Business Format Franchising'. This simply means 'the leasing of a business system by the owners of a proven business (the franchisor) to the lessee (the franchisee).
Put simply, the franchisee pays the franchisor for the right to set up in business under an established name, working to a business blueprint which already has a proven track record. The franchisor- in this case the Kip McGrath Company- provides advice and support on all aspects of running the business.
A Business Format Franchises has the following key elements:
- A renewable licence under which the franchisee can operate
- A blueprint or proven trading method which the franchisee must follow
- A defined geographical area in which the franchisee can trade
- Payments from franchisee to franchisors
- Obligations and responsibilities of the franchisor to franchisee
Franchising itself is a growing business sector world-wide, providing franchisees with survival and growth-rates, which significantly exceed conventional business start-ups. The success comes from cloning a proven business, together with giving ongoing support throughout the entire licence period.
The advantages for the franchisee are fairly obvious. They will be building on a tried and tested business format. They will receive comprehensive training before starting the business and ongoing support and advice provided by people who really know the sector. They can tap in collective advertising, development and marketing power as well as the benefits of an immediate positive corporate image.
